medium · Financial Accounting statement-of-cash-flows
An analyst observes that a company's Net Income is $40,000, but it recorded a non-cash inventory write-down of $5,000.
Assuming a 25% tax rate, what is the net impact of the write-down on Operating Cash Flow (CFO) under the indirect method?
- Increase of 5,000
- Decrease of 3,750
- Increase of 1,250
- 0
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